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Industry size and growth rates

UK Market Research - Industry Size

One of the most comprehensive estimates of the sterling value of the supply side of the market and social research industry is provided by the government’s Annual Business Survey (ABS).

The Provisional results for 2014 were published in November 2015. The ABS projects total sales turnover of £4,804bn from 3,237 enterprises on the supply side of the market research industry (as defined by companies’ self-classification under SIC code 73.2).

Within the ABS estimate, there is undoubtedly an element of double-counting the sales of many research providers which trade with other organisations in the research industry; in particular, fieldwork and data processing. MRS estimates that 15%-20% of the industry is double-counted.

MRS undertook a separate exercise to estimate the size of the industry, using the MRS database of UK organisations listed in the MRS directory the Research Buyers Guide, plus companies that are eligible for this directory that are not listed. On these bases, the current MRS estimate of the sterling size of the UK Market Research industry is in the region of £3.5 - £4bn.

MRS also publishes a League Table of the largest research suppliers (with turnover of £3mn+) which is published annually. The table includes 86 organisations of the estimated 3,000+ in the UK, and for 2014, accounted for £2.718bn. This demonstrates the extent of the industry consolidation, and the existence of a ‘long tail’ of small research suppliers which operate below this £3mn Turnover threshold.

Growth Trends

Although the ABS is used by MRS as a basis for assessing industry size, it is not considered the best source for assessing growth trends. Taken at face value the ABS suggests the industry grew by 19% between 2013 and 2014, from £4,047bn to £4, 804bn, and this is not consistent with any of MRS' other information sources. Contentious issues around the ABS include:

· Timeliness: It is not published until nearly twelve months after the year end – the 2014 estimates were not published - and then only provisionally - until November 2015.

· Double counting: the ABS approach includes the turnover of organisations that supply research services within the research industry – data collection companies and so on – as a result the figures will include this element of double counting (estimated at 15%-20% by MRS).

· Coding differences: organisations self-classify their activities when completing the ABS. There are other classifications, such as business services, where organisations that undertake research might incorrectly allocate their activities (and vice versa).

· Like-for-like: The most useful measure of growth is like-for-like organic growth, stripping out extraneous activities such as mergers and acquisitions. There is no like-for-like exercise undertaken as part of the ABS approach.

Similarly the MRS League Table does not offer a full picture when it comes to assessing growth for the whole industry. The League Table represents only the larger organisations (£3mn+) within the industry, and their growth characteristics do tend to diverge from the thousands of sub £3mn companies. It should also be noted that about one third by sterling value of the League Table comprises companies in the broader developing market segments such as advisory services, and data analytics. Growth is these segments for 2013-2014 was more than 11%, while growth for the other c. two thirds, which is mainly 'mainstream' sample-based qualitative / quantitative market/survey research, was less than half of 1 percent in 2013-2014.

Each year the MRS conducts a survey among its Company Partners and others on the supply side of the industry to monitor some of their key business parameters. Participants in the MRS Annual Survey are suppliers - large and small - across the research spectrum. It is a good indicator of not only what is happening within the more traditional research base but also among suppliers outside the league tables – the smaller suppliers of less than £3mn Turnover which, based upon the Research Buyer’s Guide exercise, MRS is now assuming makes up about one third by sterling value of the total industry.

MRS uses its own Annual Survey as the basis for estimating growth rates in the sectors of the market in which MRS Company Partners are mainly active.

The aggregate combined turnover for organisations responding to the MRS Annual Survey in 2014 was in excess of £1billion.

From their returns MRS estimates an annual turnover contraction for 2014 of -1.8%.

While Domestic Turnover did grow by 0.8% in 2014, this was outweighed by a shrinkage in International Turnover of -7.2%.

2008

2009

2010

2011

2012

2013

2014

Domestic Turnover

3.8%

-3.0%

-2.2%

-6.0%

-3.0%

-4.3%

0.8%

International Turnover

12.5%

-8.3%

4.3%

1.9%

0.3%

15.8%

-7.2%

Total Turnover

6.2%

-4.7%

-0.2%

-3.5%

-2.0%

1.1%

-1.8%






















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